CBA profits fall 3% in March quarter but funding portfolio is flourishing

Commonwealth Bank of Australia (ASX:CBA) has reported a fall of 3 percent in its profit for the March quarter – to $2.4 billion – compared to first half of the 2024 Financial Year, in its quarterly trading update released today.

And compared to the same quarter last year, profits were down 5%.

The bank’s operating performance was also tracking weaker, down 3% from the 1H2024 quarterly average, and also falling 5% since the third quarter of 2023.

In more specific operational developments, Commonwealth said that home lending volumes were up 3% in this quarter compared to December 2023, while business lending for the same period was up 7.3%, and household deposits also rose by 5.6%.

Loan impairment expenses were sitting at $191 million, with collective and individual provisions being slightly higher.

Commonwealth’s CET1 ratio was at 11.9%, a rise of 30 basis points.

But Commonwealth maintained that its portfolio credit remained strong, noting the issuing of $20 billion in new long-term funding already issued this Financial Year, meaning that around 90% of the funding which it had hoped to raise during this period has already been reached.

Within this, it was stated that the bank has already raised the funding needed to repay the remaining $32 billion of Term Funding Facility (TFF) in this Financial Year.

Commonwealth CEO Matt Comyn emphasised the importance of Australians having strong banking institutions they could turn to, particularly during this period of inflation and financial stress.

“We know that many Australians are feeling under pressure due to the higher cost of living, and we are here to support those customers that need our help,” he said.

“We have continued to strengthen our balance sheet to ensure we remain well positioned to support our customers, communities and the economy. All Australians benefit from strong and stable banks.

“We further strengthened our peer-leading provision coverage, and our CET1 capital ratio remains well above the minimum regulatory requirement.”

Commonwealth has been trading at $119.74.